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ZIP Code Costs You More Money – Here’s How

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Your local ZIP code can affect the cost you incur for different services and amenities. To ensure a good value for your money, you must initiate a good understanding on how the price and quality of different services and amenities can be affected by ZIP codes.

Sometimes, the cost of living in two different zip codes can be different by thousands of dollars. The difference can be huge when you compare between a suburban area and a city neighborhood. To know how ZIP codes can cost you more money, let’s go through our discussion below!

Impact of ZIP Codes in different sectors


The price and quality of education in a school or school district can be determined by ZIP codes. Through ZIP codes, you can find out a nearby school’s score in the ranking system, class size, distance, and more. The cost of education in places can be different in terms of their ZIP codes.

Auto Insurance

The cost of auto insurance can differ by hundreds of dollars from one place to another. Even if you go for the same insurance company, the insurance payment can be so different just because of the difference in ZIP code. As auto insurers generally charge a higher premium from drivers living in urban neighborhoods, such differences can take place.

Just a difference between a few blocks or a different ZIP code can cost you up to 64% more in your auto insurance rates. Even when people having similar conditions, such as: similar liability limits, deductibles, or coverage go for the same Insurance, it’s the ZIP code that determines how much they need to pay for the insurance. 

For instance, someone in a Chicago neighborhood could pay 64% more in premiums compared to a nearby neighborhood, even if the distance between the two places is only three-tenths of a mile. 

Real Estate

real estate for sale

When you are purchasing a real estate property, a ZIP code can come to your advantage or become a disadvantage too. If you think you would buy a cheap property anywhere and it will gentrify within a few years, it might not actually work out rather prove to be a costly mistake. 

Indeed, one of the largest influences behind the future return of your investment is the ZIP code that you bought your property in. While you cannot change much about your current location and rates, it would be a smart decision to find out the impact of your potential new ZIP code when you are shopping for a new home.

Child Care

Surprisingly, the cost of childcare facilities can also be largely affected by the ZIP code. For example, the child care costs in Chicago and Dallas show a difference of around $6000 a month.

Other Costs

ZIP code does not only impact big ticket items such as education or auto insurance. It can even affect the cost of clothing, groceries, books, and other ordinary items. Some merchants even charge higher prices online based on ZIP codes.

To get a perfect example of how the features and amenities of two nearby places can be so different, we can look at the beautiful town of Ocean City, Maryland.  The city has only two ZIP codes: 21842 and 21843. Each of the ZIP codes offer unique features, from the real estate to the amenities. To know more about the different features and amenities in these two closely nearby cities, you can read this ultimate guide on zip code.

How to Make Sure You Aren’t Paying Extra for Your ZIP Code?

  • When shopping online, you can change your browser or IP address, or use a web shopping extension such as Invisible Hand. It will ensure that you are getting the best price and not spending extra just for your ZIP code.
  • You can try checking the site from a different device. Most sites offer different price quotes depending on whether you are shopping from a phone, PC, or tablet. So, you should try from a different device to get a better price. 
  • Consider shopping outside your ZIP code. Big-box retailers, such as: Wal-mart, Target, Lowes, adjust their prices based on ZIP codes. For example, they p “ut a higher price for shops at Highlands Ranch, Colorado Wal-Mart, etc. If you want to save money, it would be better to consider shopping from Wal-Marts in Walsenburg, Alamosa, or La Junta.
  • When making an offer for your dream house, you can use the address and ZIP code of that place, and call to ask quotes for insurance rate, as well as other relevant expenses. It will help you to make a smart decision and buy the most profitable home for you and your family.

The Final Verdict

When you are buying your dream home, it is important to consider the ZIP code as it can affect different costs for your entire lifetime. If you prefer to choose your dream home over a few hundred dollars extra per month, then you can stick to your dream home. However, if you are a penny pincher, then it would be better to check the costs of all services before you buy the house.

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Editorial Disclaimer: The editorial content on this page is not provided by any of the companies mentioned and has not been endorsed by any of these entities. Opinions expressed here are author's alone

The content of this website is for informational purposes only and does not represent investment advice, or an offer or solicitation to buy or sell any security, investment, or product. Investors are encouraged to do their own due diligence, and, if necessary, consult professional advising before making any investment decisions. Investing involves a high degree of risk, and financial losses may occur.

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